Overcoming a set of significant challenges that no business should have to face in South Africa, JSE-listed investment holding company, Ayo Technology Solutions (AYO), released its audited condensed consolidated annual financial results for the year ended 31 August 2023 today. Whilst the results show a reduction in profits, a 28% increase in revenue bodes well for the future of the Group’s technology stack.
The late posting of the results is due to several factors, not least of all the need for the new management team to interrogate every aspect of the Group’s operations. Straight talking Amit Makan, CEO of AYO, states: “As the new management team coming into AYO already six months into the financial year and during a major restructure, we wanted to ensure that we spent the necessary time being thorough to present to the market a set of audited results, which can be relied on, and onto which we can set the foundation for growth in 2024 for increased shareholder value creation.”
Acknowledging the extra work and mile these results have taken, Pride Guzha, Chief Financial Officer at AYO remarked: “We would like to thank our auditors for their dedication to ensuring this first-class report and to our shareholders and the market for their patience.”
AYO believes in the power of diversity thus its portfolio is spread amongst companies and investments of different sizes, industries and Lifecyle stages. This provides the investment holding company with a spread of potential. The subsidiaries performed well, particularly the unified communications division, along with the managed services division that generated better revenues compared to the prior period.
Other positives for the Group included the settlement with a major shareholder, the Public Investment Corporation (PIC) on behalf of the Government Employees Pension Fund (GEPF), which has allowed the parties to work together on re-building value in AYO the Group and Company.
However, the overall performance of AYO, as a company, reflected the tough times it has experienced during the past financial year. These come because of a South African economy characterised by high interest rates, stubborn inflation, political instability, a lack of clear policy direction, and record levels of unemployment. Added to this were the longstanding battles with South Africa’s major banks, who have systematically sought to shut the Group out of the economy by closing the various Group and company bank accounts. The ensuing legal costs have put a strain on the company’s resources, as too the higher than expected once-off costs related to the restructuring of the company.
The losses incurred in the 2023 financial year are also attributed to the decrease in gross margins across subsidiaries, lower fair value adjustments on investments, the derecognition of derivatives and the impairment of loans.
No communication that speaks to AYO’s past financial year is complete without mention of the tragic and unexpected passing of two of the company’s Board members – AYO’s esteemed chairman Dr Wallace Mgoqi and Dr Dennis George. Both gladly gave of their considerable wisdom and expertise to AYO, and both are sorely missed.
Looking forward
“AYO embraces transformation. We perceive transformation as an essential business mandate with social, moral, and strategic dimensions. By continually transforming our business and implementing initiatives, we contribute to the development of a more equitable and inclusive society,” shared Professor Louis Fourie, interim Chairman of the Board.
Part of the operating strategy that speaks to realising this desired transformation, is to ensure efficiencies across the Group, which by and large, have been achieved during the 2023 financial year. The rightsizing and restructuring has laid the foundation for a more streamlined and agile operation for 2024. The Group will seek to resolve its impasse with the banks, whilst still focusing on growing revenues and improving margins. It will also continue to look for compatible investments to further diversify its basket.
Expressing gratitude to his team and colleagues who have supported him and the new executive through their first six months at the helm of AYO, Makan said: “I would like to thank the Board, executive management, group executives, employees and our valued strategic partners, business associates and other stakeholders for their unwavering support and loyalty throughout a demanding financial year.”
